The cost of a purchase or action measured in terms of a forgone alternative is:
A) zero for some purchases or actions.
B) the opportunity cost of the purchase or action.
C) always greater for poor individuals than for wealthy individuals.
D) not important for decisions made in planned economies since people have no choices in these economies.

Question

Quizplus · Accepted Answer

The opportunity cost of a purchase or action refers to the value of the next best alternative that is not chosen. This concept is crucial in economics for understanding the true cost of any decision, as it accounts for the benefits that are foregone by not choosing the alternative option.

The Cost of a Purchase or Action Measured in Terms